Strategy of Starbucks
1.Introduction
Company
A world phenomenon which started in 1970 from Seattle’s historic pike place market. The name of this phenomenon is inspired from classic novel about whaling industry. Howard Schultz is the man behind this occurrence, that claims 7, 521 company owned, 5,647 licensed stores in 41 countries. SBUX or Starbucks as we all know. Acquisition of 65 Seattle coffee company in 1998 made it possible for Starbucks to enter UK market
Mission statement of Starbucks
“To inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time.”
To grow SBUX invested in human resources, technology – to give hi-fi and better control of stores which increased in number day by day, stores – minute details which included fixtures and fittings, illumination, location – the principle of “everything matters”. Sales sky rocketed with new outlets being opened. The company ventured out into almost everything from restaurant, coffee shop, music (Starbucks, 2010).
With this cluster spoke and hub model each outlet began to eat flesh of each other which resulted in downward movement of sales. The chart given below depicts revenue growth for the period June 2000 to June 2008. ( Seekingalpha,2010)
However rapid store expansion is not the only cause for this downward trend, let us try to analyze what factors or elements contributed to success and failure of SBUX strategy to grow by rapid expansion
2. The Strategic Triangle
Sustainable Competitive Advantage is the mantra for any business organization in order to operate and be successful in this fierce competitive market. We will be using strategist guru Ohmae’s 3 C’s model. 3 C stands for:
a) Corporate
b) Customer and
c) Competition.
Food and beverage retail chain Starbucks came up with their strategy after analyzing each one of the above element
2.1 Corporate strategy SBUX is basically a company involved in importing; roasting and selling coffee
Company
A world phenomenon which started in 1970 from Seattle’s historic pike place market. The name of this phenomenon is inspired from classic novel about whaling industry. Howard Schultz is the man behind this occurrence, that claims 7, 521 company owned, 5,647 licensed stores in 41 countries. SBUX or Starbucks as we all know. Acquisition of 65 Seattle coffee company in 1998 made it possible for Starbucks to enter UK market
Mission statement of Starbucks
“To inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time.”
To grow SBUX invested in human resources, technology – to give hi-fi and better control of stores which increased in number day by day, stores – minute details which included fixtures and fittings, illumination, location – the principle of “everything matters”. Sales sky rocketed with new outlets being opened. The company ventured out into almost everything from restaurant, coffee shop, music (Starbucks, 2010).
With this cluster spoke and hub model each outlet began to eat flesh of each other which resulted in downward movement of sales. The chart given below depicts revenue growth for the period June 2000 to June 2008. ( Seekingalpha,2010)
However rapid store expansion is not the only cause for this downward trend, let us try to analyze what factors or elements contributed to success and failure of SBUX strategy to grow by rapid expansion
2. The Strategic Triangle
Sustainable Competitive Advantage is the mantra for any business organization in order to operate and be successful in this fierce competitive market. We will be using strategist guru Ohmae’s 3 C’s model. 3 C stands for:
a) Corporate
b) Customer and
c) Competition.
Food and beverage retail chain Starbucks came up with their strategy after analyzing each one of the above element
2.1 Corporate strategy SBUX is basically a company involved in importing; roasting and selling coffee
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